It’s official; grocery inflation has reached its highest point since 1979. The American people are responding to this with massive changes to their shopping habits. Things that used to be ignored or outright laughed at like using coupons or waiting on sales are now quickly becoming staples of the economy again. People are also picking up fewer non-essentials and willingly choosing the cheaper cuts of meat.
95% of Americans admit that they are changing their spending habits due to the rising prices per a survey conducted by Numerator of over 10,000 people in April. Half of those surveyed said they have started stocking up on essentials in recent months, especially when on sale. The same amount also claimed they search out coupons, and any kinds of discounts they can find. In both cases, an even higher percentage of consumers are wanting to adopt these practices in the coming months.
Another popular tactic is to shrink the grocery list. With this rapid and beyond expectations inflation since the start of 2022, prices are 11.9% higher as of May in a year-over-year comparison, and the people are responding in kind. Dairy prices have been the most susceptible to these pricing problems. Meat and fish have jumped 14.2%, and eggs alone are up 32.2% since May 2021.
Numerator pointed out that the respondents said they are purchasing less, and 54% are slashing all non-essential spending, with unneeded food being the first cost cut. Each household has its own definition of non-essential too. For some, this means picking up a Del Monico instead of filets or choosing generic chicken instead of free-range no antibiotic versions. These are the more fortunate.
For those already living in Biden’s poverty, this could mean the difference between going from steak once a week to once a month, or from milk to powdered milk. These kinds of changes can have a huge impact, especially on kids. While seeing the humility of having less money can help kids to grow up more well-rounded, and better able to budget, it also can cause huge problems. From stunted growth to depression, to sleep problems, these seemingly small incidents that just happen to last can make things much, much worse.
Food Industry Association (FMI) also conducted a separate survey in May. There they found that 21% of consumers aren’t buying as much meat, 14% are getting less produce, and some are also dropping the fresh options for cheaper canned products. There was a sizeable jump in these percentages for those earning under $40,000 a year.
Meanwhile, bulk stores like Sam’s Club, BJ’s, and Costco are profiting from this rush to save money. These retailers can get high-quality items, and because of the bulk purchases, consumers can save by buying from them versus their local supermarket. Costco is already known for its Kirkland editions of many famous products. Knowing how much of a budget the American people are on, they engineer these products to be consistently tested in the top 2 of any industry. This kind of value far outpaces the Walmart/Sam’s Club store brands.
Discount grocers like Aldi’s are seeing massive spikes in shoppers as well. Long favored by people who previously lived in Europe, or who like the idea of more foreign purchases, this discount retailer has found a whole new segment of consumer going up and down their aisles. Given their recent expansion into more rural towns over the last few years, this has been a huge push to their bottom line, and one they truly needed. Now the question is, when will the American consumer get the push they need?
